France Telecom Eyes Algeria as Iraq Talks Advance
France Telecom SA’s talks on acquisitions in Iraq and Cambodia are progressing, and the company may enter Algeria as it expands further into emerging markets, Chief Executive Officer Stephane Richard said.
Talks on a possible deal for a stake in Cambodia’s Mobitel are “less advanced” than those on buying part of Iraq’s Korek Telecom, Richard told reporters in Paris today.
The CEO, who took over last March, is looking to orient France Telecom toward fast-growing countries in Africa, the Middle East and Southeast Asia to offset stagnant revenue at home. He has pledged to spend as much as 7 billion euros ($9.2 billion) on emerging-market deals by 2015 as part of a plan to double revenue from those countries.
France’s largest phone company is monitoring developments in Algeria, where it could seek a presence either through existing operator Djezzy or other means, Richard said.
“Algeria is a potentially interesting market, and we will see what happens with Djezzy,” the Orascom Telecom Holding SAE- owned operator locked in a tax dispute with the North African country’s government, Richard said. No discussions on entering Algeria are under way, the CEO said.
France Telecom shares today rose 0.2 percent to 15.98 euros in Paris, valuing the company at about 42.3 billion euros.
The Algerian government is planning to buy Djezzy, possibly in cooperation with a foreign partner, and is seeking advice on a valuation. Orascom, controlled by Egyptian billionaire Naguib Sawiris, has said it will seek international arbitration to contest demands to pay more than $800 million in back taxes and restrictions on transferring money abroad from Algeria.
In Iraq, France Telecom may take a minority stake in Korek along with “a financial partner” also active in logistics, and with whom the Paris-based company has already cooperated elsewhere, the executive said. He declined to identify the investor.
France Telecom has invested in Kenya with Alcazar Capital Ltd., a Dubai-based private equity firm spun off from Agility Logistics in 2009. In 2007, Alcazar provided Korek with a $250- million convertible loan. France Telecom took control of Telkom Kenya Ltd., the former Kenyan state phone company, in partnership with Alcazar in 2007.
Entering Iraq would expand France Telecom’s influence into the heart of the Middle East, adding to expansion last year into Morocco and Tunisia. The company already operates in Jordan, Bahrain and Egypt, where it and Orascom jointly control operator Mobinil.
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